Sorry, there’s no such thing as a “revenue neutral carbon tax.” Or if there is, you’d stumble on it by pure luck:
The most important point is that revenue neutrality is most likely a mirage. We would have to maintain the carbon tax for decades in order to generate the consumption reductions that advocates argue will occur, but FICA rates aren’t static over decades. In 1950 the FICA rate was 1.5%; by 1970 it was 4.8%; by 1990 it had risen to its current rate of 7.65%. It has been stable for about two decades, but meanwhile the programs that it (in theory) funds are in crisis.
Over the next few decades, we should expect to be in bitter political fights over changing retirement ages, benefit levels, access to publicly-funded medical care, tax rates, and other measures designed to make these programs financially stable. The FICA rate will not be insulated from this process. Who could possibly say that when it has increased in irregular and unpredictable steps to, say, 15.3 percent between now and 2028 in response to various political crises, that, but for the carbon tax, it would otherwise have been 16.5 percent?
I’ve previously discussed this conceit of politicians that they can predict the economic effects of their nostrums:
When a politician says that he’s going to either cut or increase your taxes, he is engaging, wittingly or not, in a conceit and a deceit. He says it as though he has the power to do any such thing, when in fact he does not. He has no power except to reduce or increase the rate at which you pay taxes, whether on property, income, or whatever.
Think of it as the difference between a joystick and a mouse. With a computer mouse, you can point directly to the place that you want to be on a screen. With a joystick, you can only control the rate at which you move toward it, and in so doing, the target may move, and it may move faster or in a different direction than you can keep up with using your rate control. Politicians talk about tax cuts as though they have a computer mouse that allows them to pass a law and a specified amount of revenue will roll in, but the reality is that they have a slow joystick, with a nebulous relationship to the eventual goal.
As Manzi says, TANSTAAFL. I think that dropping both sides of the payroll tax until the economy recovered would have been a hell of an instant stimulus, but eventually, that money’s got to be put back into the system.
In the link attached, the author cites an author who presents th ecase that reducing CO2 output is folly and furthermore undoable. He says that the focus should be on carbon sinks instead; much more doable and a lot cheaper:
http://houstonstrategies.blogspot.com/2009/05/gas-cost-vs-commuting-and-realistic.html
7.65%
More like 15.3% for the independent consultant and for an employee the company pays the other 7.65%
Finally! Jard, somebody finally addresses the obvious, which is that only a madman would look only at the output side of the carbon cycle. It’s like trying a couch potato trying to simultaneously lose weight (less CO2) and get to the Olympics (have a roaring economy) by only dieting, no exercise.
The only rational purpose for a carbon tax would be to fund the purchase of carbon sinks, which should be a private business.
The Obama Energy Plan is to continue to increase the use of natural gas for electricity. This plan is made possible by breakthroughs (excuse the pun) in getting natural gas out of otherwise locked-in shale rock. This plan is thus made possible by Big Bad Oil Companies like Exxon-Mobil and others. The windmills are just a display to molify the environmental lobby and to produce good pictures.
Windmills at best can replace 25 percent of electric power generation, meaning the remaining 75 percent needs to come from natural gas. You could say then having the windmills makes the natural gas plants 1/3 more energy efficient.
On the other hand, the most efficient natural gas plant is 60% efficient on gas turbine combined cycle with steam turbines. Combining wind with natural gas means that to cut natural gas power in and out to make up for the variability of wind may mean that one would go with a less efficient pure gas turbine (say, 40%), which means doing away with the windmills and taking the pot of capital and spending it on the best possible natural gas plants would actually emit less carbon and use less natural gas than the windmill plan.
But never mind, there is some dude with a Physics Nobel Prize who can explain all of this to the President, and we may never get anywhere near 20% of even new power with windmills, so you heard it here first, the windmills are there for front covers of power company annual reports.
“the windmills are there for front covers of power company annual reports.”
They also use them to try and sell cars.
Dodge Circuit EV:
http://www.autobloggreen.com/photos/dodge-circuit-ev-1/1366885/
Increase the use of natural gas? At the expense of what? Coal, oil? This makes no sense to me. Why would adjusting the mix of hydrocarbons be something national government should do, as opposed to, say, market conditions?
Obviously it does zip for “carbon neutrality,” that great pot o’ faiiry gold, the “energy independence” of Jimmy Carter’s 1976 platform brought up to date with newfangled jargon. Best possible focus for national tech in the hydrocarbon business would be working out the bugs in coal gasification, desulfuring, stuff like that. There’s a lot more coal than gas in the nation.
Windmills are to the energy debate what high-speed rail is to the transportation debate. A way to bring together the grumpy Victorians nostalgic for 19th century tech, on the rather tenuous grounds it would bring back 19th century morals, and the Facebook Generation kids, who imagine if you put a cool new skin on old tech it becomes new again, or at least fashionable.
Carl, of all fossil fuels natural gas produces the least CO2 per unit of energy produced, because it has more hydrogen. That accounts for why a government which cared about CO2 would want to encourage its use over coal. Government subsidies for particular energy sources are a bad idea, but to the extent they can improve the regulatory and tax environment for relatively clean domestic fuels like natural gas, they should.
You are correct that the other side of the equation is carbon sequestration, but the jury is definitely still out on whether it can be made to work economically or not. On the other hand, natural gas is a pure win. Less carbon, less imported oil, less SOx emitted, no strip mines and its relatively cheap, too, compared to oil or renewables.
Hmm, well, I guess. Bill. Sounds reasonable to me.
But what you say, improving the regulatory environment — which means simplifying it, and removing subsidies and politically-motived wealth transfers — sounds like Dick Cheney, not Team Obama in the least. I would say the chances of something coming out of those bunch of constitutional lawyers and “community organizers” that has any reasonable resemblance to improving the regulatory and tax environment for hydrocarbon fuels is pretty much zip.
the jury is definitely still out on whether it can be made to work economically or not
What do you mean “economically?” I thought the goal here was saving the planet from eco-catastrophe, 100 foot tidal waves striking New York, that kind of thing, not turn a profit. If we’re willing to try to go back to 18th century levels of CO2 emission, which if we keep the 21st century population density suggests something like 15th century per capita wealth, I don’t see why we can’t consider, before putting on the hair shirt, keeping our booming 21st century economy, including its cheap energy sector, and using some of that wealth to pay Brazilians and Africans to plant bazillions of trees, or wall off the upper bit of the Sea of Cortez and turn it into the world’s biggest algae pond.
Thinking like an engineer, I always consider the economics of any proposed solution. It’s not a viable solution if you can’t afford to pay for it. I am not, by the way, suggesting that Team Obama would adopt my suggestions. I am also not a global warming alarmist. I was responding to your question about natural gas and your apparent enthusiasm for sequestration.
Well, I wouldn’t say I’m enthusiastic about sequestration, aside from the aesthetic pleasure I get from acres of active sequesterers, particular those in genus Sequoia, but it sure beats the hell out of (1) deindustrialization and refeudalization (I know who wants to be my feudal lord), or (2) flinging irrecoverable resources down the rabbit hole of “alternative energy” sources.
I mean, it amazes me that people think because it’s possible to formulate a sentence like we must search for alternative energy sources that they must exist, whereas a few moments informed thought would tell you this is a sentence like we must search for Atlantis or we must search for a new element with stable isotopes, and coming perilously close to we must search for a perpetual motion machine.
The way I see it, there are four forces. Gravity gives us waterfalls and windpower, tech known since the 8th century, thoroughly exploited. The strong force gives us fission and fusion, also well understood. Fission has been ruled out because we’re stupid. Fusion is tough because of that staggering activation barrier, the size of the match you need to light the fire. The weak force gives us radioactivity, but if you’re going to use that you might as well use fission, so that’s that.
What’s left? The EM force, which gives us solar energy and chemistry. Direct solar power is futile, because the power density at the Earth’s surface is too low, so you’ve got to have some collection and storage system, which inevitably brings us to chemistry, that being the way you store electromagnetic energy (barring the invention of stupendous capacitors).
Problem is, the Earth is a closed system, and it’s had 4 billion years to come to equilibrium. There aren’t many chemical reactions left that (1) have plentiful fuel lying around, but (2) magically enough, have failed to already run sometime over the past million millenia.
Except for one. That would be combustion. And the reason is simple, because we live in a giant photosynthesizing hothouse, a mad biosphere that soaks up gigartons of CO2, reduces it to carbohydrates for storage and transport, and then oxidizes it again for energy and movement. It’s a nice, neat, closed cycle, and has been running stably for millions of years. Humble logic suggests the obvious thing to do is tap into this cycle for our own needs, peel off 0.1% of the carbon for our own purposes.
Which we do — but only on the oxidation side. So logic suggests, once again, that we enlist our chlorophylled neighbors to help us out there by reducing the carbon we so merrily oxidize, balancing the books. And, amazingly enough, just as we’re aware of the problem, we discover the tools necessary: our ability to directly manipulate the genome, so that we can tailor plants and bugs to reduce CO2 just the way we want.
I mean, heck, if only combustion and the carbon cycle had just been discovered, it would be the coolest, most clever, greenest tech, and Obama would be wanting to pour billions into it. But, you know, since the tech is as old as pencils, we sit around thinking No, that can’t make sense. Make marks with a piece of charcoal encased in wood? They did that in the 16th century, back when people were stupid and uneducated. There MUST be a better way.
When carbon sequestration is discussed in the context of coal-burning power plants it normally refers to recapturing CO2 from the flue gas, compressing and liquefying it, and then injecting it into deep underground formations like depleted oil and gas fields. That’s all stuff we know how to do, but it is capital intensive as well as energy intensive, and thus very expensive.
In terms of the carbon balance, fossil fuels are a problem because the carbon they contain was previously sequestered and is now being reintroduced to the atmosphere by combustion. To counteract that by planting trees will require that you wind up with more trees than we started with in the preindustrial era, which I would submit just ain’t happening. I’m all for planting trees, but it’s not a practical way to remove all the fossil fuel derived carbon from the atmosphere.
Thankfully, there are other factors such as the ability of the oceans to dissolve more CO2. Other species besides trees also sequester carbon in their biomass, and over longer periods of time marine animals like coral sequester carbon in their shells, which eventually settle into the ocean floor sediments and become limestone.
To counteract that by planting trees will require that you wind up with more trees than we started with in the preindustrial era,
You just need to increase the mass of greenstuff taken out of circulation each year, and you’ve got your CO2 sink. I wasn’t serious about trees, because most continental greenstuff just goes back to CO2 when it decays, particularly in the tropics. You need to either bury it or grow it in the ocean, where (as you note) it buries itself by sinking the abyssal plain, where the O2 content is too low to support oxidative decay.
You can establish an algae pond next to your oil field undergoing tertiary recovery, and instead of pumping water down you pump algae sludge. Or you grow foraminefera in shallow coastal ponds and pump it offshore, hoping it slides down the continental slope before it decays.
But actually, I think the obvious thing to do is just engineer your algae or whatnot to produce your hydrocarbon fuel, and then you use that instead of coal, oil and so forth for burning. That way, you know you’re taking out just as much CO2 as you’re putting in. You’ve got a closed loop. Plus, you can leave the fancy hydrocarbon mix that is coal and oil for the pharma and plastics industry, which rely on them.
The thing to remember about trees and CO2 is that a mature forest isn’t removing any net CO2 from the atmosphere, but planting a new forest on formerly unforested land will. I’m sure you understand that, Carl, but judging by the many articles I read on being green I’m not sure most people do. If we want to get back to preindustrial CO2 levels in the atmosphere reforestation is a part of the puzzle, but as you’ve indicated not the only one.
Back to being an engineer vs. being a scientist or a politician, the governing factor is still cost. Many strategies are possible, but most are not affordable, at least at our current state of knowledge.
the governing factor is still cost. Many strategies are possible, but most are not affordable, at least at our current state of knowledge.
Nope, that’s where I disagree. I think genetically engineering algae to produce cyclohexenes (say) is perfectly plausible and economical, at least, far more so than building a hydrogen transportation infrastructure, or redesigning the grid to ship Jigawatts of electricity around to 200 million flux capacitor powered electric cars. The problem is our Dear Leader hasn’t learned any more about technology since 1976 than he has about political science. I haven’t heard a damn thing from his team that couldn’t have been said by Jody Powell circa 1977. Reducing foreign oil dependence, renewable energy, solar power, electric cars — ye gods I feel like General Pershing listening to Marshall Foch and Sir John French assert confidently that all that’s needed to break the Boche spirit is one good, solid, manly cavalry sabre charge. No, fellas, this new tech, the machine gun, is a real game changer.
The game changer in the 21st century is biotech. It’s madness to turn over the same rocks — photovoltaics, mirrors in the desert, econobox cars — we turned over 35 years ago, hoping our parents somehow overlooked some obvious piece of gold there. If we are to have radically new and powerful solutions, they must come out of that which we have now that we did not have in 1975. That would be what we know about DNA and how to meddle with it, I think.
I don’t think we’re really arguing here, Carl. I am not defending Obama’s energy policy. I also think you don’t disagree that “the governing factor is still cost.” You are merely saying that the most cost effective solution is likely to be based on biotech. That may well be true, but it’s a research project. At the same time we are pursuing multiple avenues of research there are immediately actionable things like expanding natural gas production and converting to gas-fired power plants. Let’s do both.
No, I doubt we are, Bill; or rather, we are but in the quaint old-fashioned way of exchanging views and information, to the education of both, not seeking to suppress heresy in the new postmodern fashion.
I would rather not have government decide to encourage natural gas over oil or coal, however. I think that’s a decision best left in the hands of the experts, i.e. the engineers who run Chevron. No way I’d trust a pack of lawyers in Washington who can’t find their ass with both hands and a flashlight to do a better job.
I would certainly agree government should get off their back, however. Enough God-damned populist puppet show “windfall taxes,” for example, and no more letting states veto exploration more than a mile offshore.
Government may have some role to play in biotech R&D, but I’m not sure; the pump seems very well primed as it is. Once again, probably the best thing to do is get the hell out of the way. Stop sucking up the nation’s capital like a giant Hoover, for example, so that entrepreneurs can borrow at reasonable rates.
I would certainly agree government should get off their back, however.
Amen to that. I am definitely in the school of “get out of their way and let private industry go to work”. I do think there is a role for government funded research on long lead time stuff. Maybe the pump is well primed on biotech energy conversion, but I’m sure there are other areas where that isn’t true.
Sure, Bill. But it’s got to be pure blue-sky stuff, that no rational person would ever invest R&D money in right now, because the pay-off is far too far away, or too unlikely. That’s the purpose of government.
So we should tie a stone around Babs Mikulski and through her into the mill pond, and get back to “curiousity-driven” research, with zero obvious ties to technology, except on basic principles. Send money to physicists curious about polymer dynamics, to chemists who think building cubanes is fun, to biologists wanting to figure out the protein folding code, to engineers who are fascinating by the possibility of getting an airplane to fly itself. Crazy stuff, the stuff of dreams. That’s our seed corn for 50 years out.
Crazy stuff, the stuff of dreams. That’s our seed corn for 50 years out.
It sure would be nice to have an organization like Heinlein’s Long Range Foundation in Time for the Stars. The LRF was explicitly established to throw money at research problems that didn’t have a prayer of solution within a century.